Commercial & Contract · Mandatory · Pre-Construction

Main Contract Agreement

The principal contract between the client and the main contractor.

Last reviewed: 29 March 2026 — This guide reflects UK law as of this date. Contract Law / JCT / NEC remains current with no amendments enacted as of 29 March 2026. Next scheduled review: 29 March 2027.

Legal basis	Contract Law / JCT Suite of Contracts / NEC4 Suite of Contracts
JCT 2024 DB updates	Mandatory collaborative working clause (Article 3), gender-neutral language throughout, epidemic clauses, updated dutyholder provisions aligned with Building Safety Act 2022 Part 2A, expanded ground condition provisions
Loss & expense response	Under JCT 2024, the contract administrator now has 8 weeks (reduced from 12 weeks) to respond to loss and expense claims from the contractor
Contract formation	A valid contract requires offer, acceptance, consideration, and intention to create legal relations
Execution	Contracts may be executed under hand (6-year limitation period) or as a deed (12-year limitation period)

1. The Main Contract

The main contract agreement is the foundation of all commercial relationships on a construction project. It establishes the legal framework between the employer and the contractor, defining the scope of works, the contract sum, the programme, the allocation of risk, and the mechanisms for managing change, payment, and disputes. Every decision made during the life of the project — from the first instruction to the final account — flows from this document.

The two most widely used standard forms in the UK are the JCT (Joint Contracts Tribunal) and NEC (New Engineering Contract) suites. JCT contracts are prescriptive, setting out detailed rules and procedures. NEC4 contracts are built around a collaborative management philosophy, using early warnings, compensation events, and programme-based project management. The choice between JCT and NEC depends on the nature of the project, the employer's procurement strategy, and the level of active contract management that will be applied.

JCT 2024 Design and Build introduced several significant changes, including a mandatory collaborative working clause under Article 3, gender-neutral language throughout the suite, epidemic clauses, updated dutyholder provisions to align with the Building Safety Act 2022 Part 2A, expanded ground condition provisions, and a reduced response period for the contract administrator on loss and expense claims from 12 weeks to 8 weeks.

Bespoke amendments can breach the Construction Act

When amending standard form contracts, care must be taken not to inadvertently breach the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act). The Act provides statutory rights to interim payment, a payment mechanism with payment and pay less notices, and the right to adjudication. Any amendment that removes or undermines these rights will be rendered ineffective by the Act, and the Scheme for Construction Contracts will apply instead — often producing a less favourable outcome than the original standard form provisions.

2. Key Elements

The following elements are the core components of a main contract agreement. Each must be clearly defined and correctly completed in the contract particulars before execution.

Element	Detail
Contract form	The standard form selected for the project (e.g. JCT DB 2024, JCT SBC 2024, NEC4 ECC Option A). The form determines the allocation of design responsibility, the payment mechanism, and the change management process.
Parties	The employer and the contractor, identified by full legal name, registered address, and company registration number. On design and build contracts, the employer's agent may also be named.
Contract sum	The agreed price for the works, exclusive of VAT. Under JCT, this is a lump sum. Under NEC4 Option A, this is the total of the activity schedule. The contract sum is adjusted during the project by variations, loss and expense, and other contractual mechanisms.
Date for completion	The date by which the contractor must achieve practical completion of the works. This date may be adjusted by extensions of time granted under the contract. It is the reference point for liquidated damages.
Liquidated damages	A pre-agreed rate of damages (typically expressed as £X per week or per day) payable by the contractor to the employer if the works are not completed by the date for completion (as adjusted). Liquidated damages must be a genuine pre-estimate of the employer's likely loss.
Retention	A percentage (typically 3% to 5%) deducted from interim payments and held by the employer as security against defects. Half is released at practical completion and the remainder at the end of the defects liability period.
Defects period	The period (typically 12 months from practical completion) during which the contractor is obliged to return to site and rectify any defects that appear. Known as the rectification period under JCT and the defect correction period under NEC4.
Insurance	The contract specifies which party is responsible for insuring the works (Joint Names or contractor's all risks), public liability insurance minimums, and professional indemnity insurance requirements where design responsibility is carried by the contractor.
Dispute resolution	The contract must provide a right to adjudication (a statutory requirement under the Construction Act 1996). Most contracts also provide for mediation and, ultimately, arbitration or litigation as the final dispute resolution mechanism.
Execution	The contract is signed by authorised representatives of both parties. Execution under hand gives a 6-year limitation period for claims. Execution as a deed (requiring a witness) gives a 12-year limitation period.

3. Common Mistakes

Not executing the contract before construction starts

One of the most common and most damaging failures in construction procurement is allowing works to begin before the main contract has been executed. When construction proceeds without a signed contract, the parties are left relying on letters of intent, implied terms, or conduct — all of which create uncertainty about the scope of works, the price, the programme, the allocation of risk, and the mechanisms for managing change and disputes. Executing the contract before any work starts on site is the single most important step in protecting both parties.

Over-amending the standard form

Standard form contracts are carefully drafted and balanced documents. Extensive bespoke amendments can introduce inconsistencies, create unintended gaps in liability, and undermine the established case law that gives the standard form its predictability. Over-amendment also increases the risk of inadvertently breaching the Construction Act — particularly around payment provisions and adjudication rights. Amendments should be kept to the minimum necessary, clearly drafted, and reviewed by someone with contract law expertise.

Incorrect or incomplete contract particulars

The contract particulars (or contract data under NEC) contain the project-specific information that tailors the standard form to the individual project — including the contract sum, the date for completion, the liquidated damages rate, the retention percentage, the defects period, and the insurance provisions. Errors or omissions in the contract particulars can create ambiguity, trigger disputes, and undermine the enforceability of key provisions. Every entry in the contract particulars must be checked, cross-referenced, and confirmed before execution.

Not providing Building Safety Act gateway requirements on higher-risk building projects

For higher-risk buildings (HRBs) under the Building Safety Act 2022, specific gateway requirements must be addressed in the contract. These include the appointment of dutyholders (principal designer and principal contractor under the new regime), compliance with the golden thread of building information, and provisions for the Building Safety Regulator's gateway approval process. Failing to incorporate these requirements into the main contract creates a disconnect between the contractual obligations and the statutory duties, exposing both the employer and the contractor to regulatory risk.

4. Frequently Asked Questions

What is the Construction Act?▾

The Housing Grants, Construction and Regeneration Act 1996, commonly known as the Construction Act, is the primary piece of legislation governing payment and dispute resolution in UK construction contracts. It provides three key statutory rights: the right to interim payment (with a defined payment mechanism including payment notices and pay less notices), the right to suspend performance for non-payment, and the right to refer any dispute to adjudication at any time. The Act was amended by the Local Democracy, Economic Development and Construction Act 2009, which strengthened payment provisions and removed the requirement for contracts to be in writing. Any construction contract that fails to comply with the Act will have the relevant provisions of the Scheme for Construction Contracts implied into it.

When should I use JCT vs NEC?▾

The choice between JCT and NEC depends on the project type, the employer's procurement strategy, and the level of active contract management that will be applied. JCT contracts are widely used in the private sector for traditional and design-and-build procurement. They are prescriptive, well understood by the industry, and supported by extensive case law. NEC4 contracts are widely used in the public sector and on large infrastructure projects. They are built around a collaborative management philosophy, using early warnings, compensation events, and programme-based management. NEC4 requires active and diligent contract administration — if the parties do not operate the contract management procedures properly, the NEC framework can produce unexpected outcomes. Neither form is inherently better — the right choice depends on the project and the parties involved.

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